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Gold assets top 2,000 tons as investors pour funds into havens

Thursday, July 7, 2016 - 09:24
30522754 - 21_01_2014 - UK GOLD.jpg
Global gold holdings topped 2,000 metric tons for the first time since July 2013 as the fallout from the UK's vote to quit the European Union fuses with rising speculation that US interest rates won't rise any time soon to fire up a hunt for haven assets.

[BEIJING] Global gold holdings topped 2,000 metric tons for the first time since July 2013 as the fallout from the UK's vote to quit the European Union fuses with rising speculation that US interest rates won't rise any time soon to fire up a hunt for haven assets.

Holdings in bullion-backed exchange-traded funds rose 4.1 tons to 2,001.4 tons on Wednesday, according to data compiled by Bloomberg. The latest uptick followed an influx of 38.1 tons on Tuesday, the most in tonnage terms in a single day since 2009.

Gold prices have risen to the highest level in more than two years after the UK vote roiled markets and spurred a rise in risk aversion, reinforcing the case for the Federal Reserve staying its hand on further rate increases.

Global ETF assets have risen in tandem, expanding 37 per cent this year following three years of decline. Bullion has likely entered the early stages of the next bull run, UBS Group AG said in a report this week.

"Gold remains attractive as investors seek some security away from the volatility in financial markets," Australia & New Zealand Banking Group Ltd said in a note on Thursday before the latest ETF tally was released.

"Market volatility continues to drive investors toward gold."

Gold for immediate delivery traded 0.3 per cent higher at US$1,368 an ounce at 7:54am in Singapore, gaining for a seventh straight day, according to Bloomberg generic pricing.

It rallied to US$1,375.28 on Wednesday, the highest level since March 2014.

BLOOMBERG